Pound slumps to lowest level since October after Theresa May hints Britain is heading for a ‘hard Brexit’

THE POUND slumped to its lowest level since October this morning after Theresa May gave her biggest indication the Britain is heading for a so-called ‘hard Brexit’.

Sterling slumped after the Prime Minister all but confirmed the UK would be leaving the lucrative Single Market trading system in an interview yesterday.

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It fell a cent against the dollar after trading opened, and was also trading down against the euro at 1.15.

Speaking to Sky News on Sunday morning Mrs May said the Government is "working to get the best possible deal" for the UK on the issue of trade.

But she stressed the importance that will be given to gaining full control over immigration during Brexit divorce negotiations with Brussels.

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Pressed on the issue of single market membership, the Prime Minister said some people had suggested the UK could "keep bits" of EU membership as it looks to leave the bloc.

Mrs May appeared to shut down that possibility as she said: "Often people talk in terms as if somehow we are leaving the EU but we still want to kind of keep bits of membership of the EU.

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“We are leaving. We are coming out. We are not going to be a member of the EU any longer."

She was then asked directly several times if the UK would therefore be leaving the single market, but refused to confirm this would be the outcome of talks in Brussels.

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But it was widely seen as a very strong indication this would in fact be the case, with the currently markets appearing to agree.

Analysts at RBC Capital Markets said: "Comments from UK PM Theresa May in a TV interview broadcast Sunday are being interpreted as an indication that the UK government will prioritise immigration control over single market access in its negotiations on exiting the EU."

The pound has dropped around 18% against the US dollar and 10% versus the euro since the June 23 vote as traders expect the British economy to be significantly weaker once it quits the European Union.